Transnet to create unit in October to enable private rail access

Transnet SOC Ltd. is pushing ahead with plans to boost private participation in South Africa’s ports and freight-rail networks as the state-owned logistics company’s operational performance deteriorates.

By the end of October it plans to create an infrastructure manager to allow private companies to run trains on key freight tracks, Khumbudzo Ntshavheni, South Africa’s minister in the presidency, said in a statement on Tuesday. Those rail lines move cars, metals and coal to ports and import fuel and automotive parts.

The company also expects to form partnerships with private operators at the Durban Pier 2 Container Terminal, part of Africa’s biggest container port, and at the Ngqura Container Terminal in the coming months.

Declining performance

The drive to increase private-sector investment in South Africa’s logistics and power industries comes as government struggles to arrest the declining performance of its state-owned companies and deliver basic services to citizens.

The government is also helping Transnet to seek additional locomotives and is pushing law enforcement agencies to reduce the cable theft that’s idling sections of the Container Corridor, which carries goods to and from the port at Durban and the industrial hub of Gauteng.

Ntshavheni also said a Water Partnerships Office has been established in the state-owned Development Bank of Southern Africa to boost private participation in water re-use, wastewater treatment, desalination and sanitation projects.

“These reforms are necessary both to address the immediate challenges that we face, and to drive a fundamental transformation of our economy in the months and years to come,” she said.

© 2023 Bloomberg